Which factor would typically indicate high threat of new entrants in an industry?

The factor that typically indicates a high threat of new entrants in an industry is low barriers to entry. When barriers to entry are low, it means that new companies can easily enter the market without facing significant obstacles such as high costs, stringent regulations, or complex technology requirements. This ease of entry can lead to increased competition, as more firms can bring their products or services to the market, potentially increasing choice for consumers and driving down prices.

In contrast, high customer switching costs, strong brand loyalty, and high initial capital investment work together to create challenges for new entrants. High customer switching costs make it difficult for newcomers to attract customers from established competitors, while strong brand loyalty means consumers are likely to stick with familiar brands rather than try new entrants. High initial capital investment represents a significant financial hurdle that new companies must overcome to start operations, deterring many potential entrants from even attempting to enter the market. Therefore, low barriers to entry are a clear indication of a high threat of new entrants.